In a bold and strategic move, Perplexity AI has submitted a bid to ByteDance, the parent company of TikTok, proposing the creation of a new merged entity. This new structure would combine Perplexity, TikTok’s U.S. operations, and additional capital partners, according to insider information obtained by CNBC. The plan aims to preserve equity stakes for most of ByteDance’s current investors while leveraging the opportunity to infuse more video capabilities into Perplexity’s platform.
A Rapidly Ascending Contender
Perplexity AI, an artificial intelligence-powered search engine startup, has seen a meteoric rise in valuation—from $500 million at the start of 2024 to an impressive $9 billion by year’s end. This growth comes amidst a booming generative AI market and investor interest despite facing controversies such as plagiarism accusations. The company competes directly with OpenAI and Google in redefining how people access and consume information online.
AI-enhanced search capabilities have been flagged as a significant disruptor to Google’s dominance in online search, with platforms like Perplexity offering more conversational, context-rich responses. Competitors such as OpenAI have already launched AI-driven search engines like SearchGPT, while Google introduced its “AI Overviews” feature to maintain its market position.
The TikTok Factor
Perplexity’s merger proposal comes at a critical time for TikTok, as its future in the U.S. hangs in the balance. TikTok faces potential bans unless agreements are reached with U.S. regulators. ByteDance has maintained its stance against selling TikTok’s U.S. operations, which is why Perplexity’s approach—a merger instead of an outright acquisition—might hold appeal.
President-elect Donald Trump, in an interview with NBC News, suggested that TikTok might be granted a 90-day extension to finalize a deal once his administration begins. This provides a narrow but pivotal window for negotiations to unfold. TikTok CEO Shou Zi Chew, in a video posted on the platform, expressed optimism about finding a solution to keep TikTok operational in the U.S.
Deal Dynamics and Financial Stakes
The proposal would not only merge Perplexity and TikTok U.S. but also bring in new financial backers. Insiders suggest that the deal could be valued “well north of $50 billion,” depending on how many of ByteDance’s current shareholders choose to retain their stakes versus those opting to cash out.
If successful, the merger could significantly expand Perplexity’s reach, integrating its AI-powered search capabilities with TikTok’s vast audience and video ecosystem. This collaboration could set a new precedent for how AI and social media platforms converge to deliver personalized, engaging content.
The Road Ahead
While the potential merger remains in its early stages and could take months to finalize, the proposal represents a major shift in the digital media and AI industries. If approved, it could solidify Perplexity AI’s role as a key player in reshaping how information and entertainment are accessed and consumed globally.
This evolving story highlights the increasing interplay between artificial intelligence, social media, and regulatory dynamics—a landscape that could define the future of digital innovation.
